What Is Sell-Side?

Sell-side is the part of the financial industry that is involved with the creation, promotion, and sale of stocks, bonds, foreign exchange, and other financial instruments to the public market. The sell-side can also include private capital market instruments such as private placements of debt and equity. Sell-side individuals and firms work to create and service products that are made available to the buy-side of the financial industry.

The sell-side of Wall Street includes investment bankers, who serve as intermediaries between issuers of securities and the investing public, and the 澳洲幸运5官方开奖结果体彩网:market makers who provide 澳洲幸运5官方开奖结果体彩网:liquidity in the public 🍨market. Investment bankers and corporate finance advisors play the same role for priv🦩ate issues of debt and equity.

Understanding Sell-Side

The sell-side and buy-side of Wall Street are 澳洲幸运5官方开奖结果体彩网:two sides of the same coin. One is 🌟dependent upon the other and could not😼 operate without the other. The sell-side tries to get the highest price possible for each financial instrument while providing insight and analysis on each of these financial assets.

Buy-side players in the public market include money managers at 澳洲幸运5官方开奖结果体彩网:hedge funds, institutional firms, 澳洲幸运5官方开奖结果体彩网:mutual funds, and pension funds. Individual investors are technically on the buy-side. In the private market, private equity funds, VC funds, and ventไure arms of corporations investing in startups are on the buy-side. However, the term mostly applies to professional money managers. On t💧he sell-side of the equation are the market makers who are the driving force of the financial market. For example, any individual or firm that purchases stock to sell it later at a profit is from the buy-side. 

Foreign Exchange Sell-Side

The FX market is the world's largest financial marketplace, with more than an estimated $6.6 trillion changing hands daily, as of 2019. Here, the sell-side is dominated by top multinational banks, led by JP Morgan Chase, Citibank, Deutsche Bank, and UBS. Bank trading rooms are divided into two groups:

1. Interbank traders who buy and sell large amounts of currency on the spot and forward markets.
2. The salespeople that sell securities to buy-side customers including hedge funds, mutual funds, and large corporations.

Many interbank traders take proprietary 🎐positions, but salespeople generally do not.

Bond Market Sell-Side

The global 澳洲幸运5官方开奖结果体彩网:bond market is t🌼he world's second-largest financial marketplace, with an estimated value of over💧 $100 trillion. The U.S. bond market is estimated to be valued at approximately slightly over $40 trillion.

Investment banks dominate the sell-side, with the largest being Goldman Sachs and Morgan Stanley. JP Morgan Chase and Bank of America, which combine 澳洲幸运5官方开奖结果体彩网:commercial and 澳洲幸运5官方开奖结果体彩网:investment banks under a single holding company, underwrite and manage bond issues. Many are also primary dealers of 澳洲幸运5官方开奖结果体彩网:U.S. Treasury bonds, which mea🌄ns that they buy directly from the U.S. Treasury. The investment banks are ❀very active, both trading and taking positions in the bond market.

Stock Market Sell-Side

Investment banks also dominate the sell-side of the 澳洲幸运5官方开奖结果体彩网:stock market. They underwrite stock issuance, take proprietary positions, and sell to both institutional and individual investors. One of the most high-profile activities of the sell-side in the stock market is in 澳洲幸运5官方开奖结果体彩网:initial public offerings (IPOs) of stocks. Companies can't go public themselves. They must enlist the services of an investment bank for underwriting. Underwriters are typically brokers, who act as a buffer between companies and the investing public, and who market and sell those initial share꧑s.

Example of Sell-Side

A wealthy individual worth millions of dollars is looking to invest a significant portion of his capital. He heads to an investment bank for some options. The 澳洲幸运5官方开奖结果体彩网:private wealth management division of the investment bank takes a look at the individual's assets and 澳洲幸运5官方开奖结果体彩网:risk tolerance and comes up with aᩚᩚᩚᩚᩚᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ𒀱ᩚᩚᩚn investment strategy for the individual as well as certain financial products they ca🎃n sell to him.

♎The individual takes on the business of the investment bank, paying it commissions and fees for managing his money. The business that the investment bank has offered the wealthy individual is consid♔ered the sell-side of the business as it is selling to the client services and financial products.